Take an idea and run with it

Roopinder Singh 

Behind every success is a story. A start-up to a billion-dollar company makes a compelling subject, especially if the narrator is a former CEO and co-founder, more so if the company is Netflix. Yes, the streaming giant that is now in what seems to be like every connected living room (at least 15 crore of them according to one account) started small — and, in its original avatar, it was far from what it has become.

In January 1997, Randolph and his boss Reed Hastings carpooled to work, to a company that had been sold. As a result, both men were now redundant. They were required to be in office for the next few months, and used their time to hash out ideas for a new venture, with Randolph proposing and Hastings disposing — using his logic and analytical abilities to demolish what were, admittedly, often half-baked ideas.

Then Randolph proposed the idea to provide VHS tapes via mail to customers. But these turned out to be bulky and fragile. Then Hastings mentioned that there was a new recording media, the DVD. That worked. Hastings provided $1.9 million to start work. They did so with eight employees. A year later, on January 14, 1998, Netflix, the “world’s first online DVD rental store” got its first 150 orders, far exceeding the expectations of the 30-member team that had launched the company. The servers crashed after the first 10 minutes, and much time was spent buying new hardware and configuring it. 

Netflix was listed on the New York Stock exchange on May 29, 2002. And what a journey it has been for what-started-in-a-small-office operation into the media behemoth it is today. Marc Randolph was there through it all, and then he wasn't. The man who had co-founded the company found himself redundant. He left the company in the hands of the co-founder. Also gone was the seat on the board and most of his stock.

Randolph has moved on to other ventures, less stressful ones, now that he doesn’t quite have to worry about mortgage payments to the million-dollar home he and his wife Loraine, whose initial reaction to the idea gave the book its title, moved into soon after he had started the company. His Audi Q7 still seems to be there. This indulgence was tempered by a sense of self-depreciation that made him keep the exterior dirty when he drove into work. 

He is visibly proud of his parents, the nuclear scientist father and the mother who ran a real estate business. She provided him cash when he needed to run the company, something that paid her back manifold, with enough to buy an apartment in the Upper East Side of Manhattan. Then there is the connection to Sigmond Freud that the family is chuffed about. Marc traces much of his business ethics to his father's rules of success (see box). 

Here is a man who has found a work-life balance that would be the envy of many. He has reinvented himself in a fulfilling way. Still, the story of his struggle along the rocky road of success, the Randolph and Hasting dialectic, the brutality of “radical honesty”, the fight for attention, money and validation and then the battle with entrenched players like the now-defunct Blockbuster, all make for interesting reading. 

A combination of timing, brilliance and perseverance along with a little bit of luck all combined to make Netflix a success. What was also necessary was to be focused, especially on data, to have the ability to change when required and to innovate and focus on consumers constantly. The contrasting styles of the co-founders complemented each other, as did their skill-sets — his analytical mind and Hastings’marketing acumen and consumer focus. 

Now that Netflix is a verb, the tale of its origin provides the grounding needed to understand it. Data collection and analysis have a far more significant role to play in this content-driven service than commonly thought. Marc Randolph and Reed Hastings’ creation is shaping our minds, for once we have an account that describes how it was shaped into what it has become. 

Randolph's rules for success

When I was twenty-one years old, fresh out of college and about to start my first job, my father gave me a handwritten list of instructions. The whole thing took up less than half a page, in my father’s neat engineer’s handwriting. It read (original sentence structure retained):

Do at least 10% more than you are asked.

Never, ever, to anybody present as fact opinions on things you don't know. Takes great care and discipline.

Be courteous and considerate always — up and down.

Don't knock, don't complain — stick to constructive, serious criticism.

Don't be afraid to make decisions when you have the facts on which to make them.

Quantify where possible.

Be open-minded but sceptical.

Be prompt.

  ...And I've tried, for my entire life, to live up to all eight rules. — Marc Randolph